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Hello John,
Please help me understand the calc on Example 4 gain/loss on futures sell-buy (93.50-90.83/400) how do we arrive the annual int rate of 400?I explain this in detail in my free lectures working through the lecture notes. It is pointless using the notes without watching the lectures – they are not a Study Text and the I work through the examples in the lectures and explain and expand on the notes.
We always divide by 400. It is 100 because the futures prices correspond to percentages and we divide by 4 because they are 3 months futures, and there are 4 periods of 3 months in a year.
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